Shares of Indian Railway Catering and Tourism Corporation (IRCTC) gained five percent on Thursday after the stock has been in a downtrend for the last two days and corrected over 22 percent during the period. At 09:20 am, IRCTC was trading 5.01 percent up, or higher by 222.15 points, quoting at Rs 4,656.50.
On October 19, the PSU stock surged nine percent to hit an all-time high of Rs 6,393 and became the ninth public sector entity to join the club of Rs one lakh crore market capitalisation (m-cap).
However, due to profit-booking, the stock experienced a sharp drop of over Rs 1,000 and finished 8.75 percent down on the BSE in the next two days.
In the last two trading days, IRCTC investors lost about Rs 30,000 crores. On Wednesday, the stock lost Rs 930 in value, or 17.3 percent per equity share, bringing the entire market worth to 70,927.20.
Experts say the fundamentals of the stock are still intact, and the correction came on the back of its overvaluation. Hence, they call it a technical correction and advise long-term investors to not panic and hold the stock.
Santosh Meena, Head of Research, Swastika Investmart, said the fundamentals are still strong. "But there is valuation concern after a steep run and there was a clear speculative move as it was easy for traders to make money every day. So we are seeing a technical correction, and Rs 4,000-3,800 will be a critical demand zone to take fresh buying positions."